Few, if any, asset classes are currently being vilified as much as Russian equities.

At the start of trading Tuesday, the Market Vectors Russia ETF (RSX), the oldest, largest and most heavily traded Russia ETF, had plunged more than 40 percent over the previous 90 days as the ruble and oil prices tumbled.

And that was before U.S. markets had a chance to digest news out late Monday that the Russian central bank boosted its benchmark interest rate to 17 percent from 10.5 percent. Smacking of desperation and panic, the rate hike was the second since Thursday and in the span of less than a week Russian borrowing costs have more than doubled from 8 percent.

However, the behavior of Russian securities, including RSX, is pricing in scenarios that are more dire than will actually come to pass. For example, the ruble’s plunge implies Brent crude falling to $25 a barrel, a 58-percent drop from current levels. Additionally, some market participants are treating the Russia of 2014 as a carbon copy of the Russia 1998. That much is seen with the recent, exponential rise in default odds, which jumped to 28.5 percent on Monday from 20 percent on Dec. 8. Remember, that is for a country with $400 billion in foreign currency reserves and just $38 billion in dollar-denominated debt, a mere $6 billion of interest and principal payments is due next year.

Please view the rest of this commentary on CNBC.com where it originally appeared earlier Wednesday.

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